On April 8th, 2021 the benchmark 30 year fixed rate averaged 3.13%. On March 31st, 2022, the average for a 30 year fixed rate loan is at 4.67% according to Freddie Mac. On a loan of $1,000,000, the increase in the interest rates have added an additional $881.88 per month to the monthly payment for a buyer compared to the same time last year. How has this impacted our markets? Looking at the numbers for San Mateo County for the month of February, we can see that the number of closed sales dropped from 246 single family homes sold in 2021 to 216 homes sold in 2022. This is a decline of 11.29% in closed sales. The average home in San Mateo County sold for $2,447,197 in February of 2021. This number increased to $2,486,665 in 2022.
Did you know that close to 25% of all homes sell without ever hitting the open market?
The average sale increased by 1.61% or $39,468 for the month of February, year over year. The increase in interest rates does not seem to be forcing buyers to the sidelines. Inventory may be a bigger issue than interest rates. The amount of single family homes listed for sale at the end of February of 2021 was 426 homes in San Mateo County. In 2022, this number dropped to 324. Homes listed for sale dropped 24.06% year over year. We are just hitting the meat of the buying season. It will be interesting to see if interest rates or inventory will ultimately have a larger impact to our markets.
Sourced: Peter Pham with Guaranteed Rate Mortgage Company
